Kickstarter raised almost $120m last year

Company's revenue around $6m

Benjamin Jackson at The Next Web has managed to scrape out some numbers from the crowd-funding site Kickstarter, and estimates the company has raised $119m in successful projects in the last year:

That’s almost three times as much as the amount raised during the company’s first two years. Taking into account Kickstarter’s 5% commission, we can estimate that the company took home just shy of $6m in commission revenue in its third year. And it’s not the only one cashing in: with Amazon’s commission of 2.9% plus 30¢ per transaction, the online retailer pulled at least $3m in fees during the same period.

Adding in the figures from last year, it looks like Kickstarter has helped raise a total of $159M since its inception.

Those figures also exclude any project fully funded but not yet completed – including the Pebble watch, the most successful Kickstarter project to date, which has raised over $6m already and has almost a month until its funding period is over.

Jackson also looks at what we can expect from Kickstarter in the future. It's back-of-a-napkin stuff, but if the company keeps growing at the apparently exponential rate that it is now, it will hit half a billion dollars raised towards the end of next year.

Two questions follow from this: Where now for Kickstarter, and what does this mean for the wider economy?

The number that jumps out at me from the Jackson's analysis is the profit Amazon is making for processing payments. Kickstarter is fairly strongly tied to the retail giant, which runs the only online payment platform that offers the ability to reserve, but not take, a payment. This is crucial for Kickstarter's model, since it relies on being able to guarantee backers that they won't be charged unless a project is successful, while ensuring that when the time comes to ask for the money, people pay up.

It must be sorely tempting to try to drive down Amazon's share of the revenue, but without any potential to switch to an existing competitor, Kickstarter isn't in a position to drive hard bargains. If it had a cash injection, developing its own may become a possibility – but even then, it appears to have higher priorities, like expanding outside of the US (anyone can back a Kickstarter project, but only American citizens can start one).

What about the other way round? Amazon has retail expertise, close ties with the company, and already runs most of its infrastructure (as well as payments, Kickstarter is hosted on Amazon's cloud computing platform). Could Kickstarter be an acquisition target? Maybe, but there is a risk of slaying the golden goose. Amazon already makes millions from Kickstarter for comparatively little effort; unless that money is at risk, Amazon would be well advised to sit back and rake it in.

More broadly, it may seem strange to talk about what a company through which "only" $100m passes annually – a rounding error in the American economy – but that isn't how Congress seems to view it. A key provision in the recent JOBS Act allowed Kickstarter, and companies like it, to give backers not only rewards, but actual equity in the companies they choose to support. The act was subject to a lot a criticism for these measures, including by supporters of the "crowdfunding" model, but even if the implementation was shoddy, there is no doubt that it reflects a broader trend. Soon, we'll all be venture capitalists – and Kickstarter will be the middleman raking in the fees.

The Pebble watch, the highest funded Kickstarter project to date.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Reuters
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Murder by numbers: the legacy of the Grenfell Tower fire

It is difficult to refute the reality of suffering when the death toll is still being reckoned.

How do we measure human malice? Sometimes it’s all too easy. This summer, British cities are struggling through the aftermath of successive terrorist attacks and hate crimes. The Manchester bombing. The Westminster Bridge murders. The London Bridge atrocity. The attack on people outside the Finsbury Park Mosque in north London and on other mosques. The unidentified young men who are still at large in the capital after spraying acid in the faces of passers-by, mutilating them.

In Britain, we are commendably resilient about these things. Returning to London after some time away, I found my spirits lifted by an issue of the London Evening Standard magazine that celebrated the ordinary people who stepped in to help after these atrocities. The paramedics who worked through the night. The Romanian chef who offered shelter in his bakery. The football fan who took on the London Bridge terrorists, screaming, “Fuck you, I’m Millwall!” The student housing co-ordinator who rushed to organise board for the victims of the inferno at the Grenfell Tower and their families.

Wait. Hold on a second. One of these things is not like the others. The Grenfell Tower disaster, in which at least 80 people died, was not a terrorist or malicious attack. It was the result of years of callous council decisions and underinvestment in social housing. On 14 June, entire families burned alive in their homes partly because, it is alleged, the Royal Borough of Kensington and Chelsea would not pay the extra £5,000 or so for fire-resistant cladding. Nor could it find the cash, despite a budget surplus, to instal proper sprinkler systems on the rotting interior of the building.

Kensington and Chelsea is a Tory borough that, in cash terms, cares very little for poorer citizens who are unlikely to vote the right way. In 2014, while the Grenfell Tower residents were refused basic maintenance, the council handed out £100 rebates to its top-rate taxpayers, boasting of its record of “consistently delivering greater efficiencies while improving services”. Some of those efficiencies had names, and parents, and children.

This is a different sort of depravity altogether. It’s depravity with plausible deniability, right up until the point at which deniability goes up in flames. Borrowing from Friedrich Engels, John McDonnell described the Grenfell Tower disaster as “social murder”. The shadow chancellor and sometime Jack Russell of the parliamentary left has never been known for his delicate phrasing.

Naturally, the Tory press queued up to condemn McDonnell – not because he was wrong but because he was indiscreet. “There’s a long history in this country of the concept of social murder,” he said, “where decisions are made with no regard to the consequences… and as a result of that people have suffered.”

It is difficult to refute the reality of that suffering when the death toll is still being reckoned from the towering tombstone that now blights the west London skyline.” As the philosopher Hannah Arendt wrote, “The sad truth is that most evil is done by people who never make up their minds to be good or evil.”

Market austerity is no less brutal for being bloodless, calculating, an ideology of measuring human worth in pennies and making cuts that only indirectly slice into skin and bone. Redistributing large sums of money from the poor to the rich is not simply an abstract moral infraction: it kills. It shortens lives and blights millions more. Usually, it does so in a monstrously phlegmatic manner: the pensioners who die early of preventable diseases, the teenagers who drop out of education, the disabled people left to suffer the symptoms of physical and mental illness with nobody to care for them, the thousands who have died on the waiting lists for state benefits that they are perfectly entitled to, the parents whose pride disintegrates as they watch their children go to school hungry.

We are not encouraged to measure the human cost of austerity in this way, even though there are many people in back offices making exactly these sorts of calculations. This year, when researchers from the Journal of the Royal Society of Medicine claimed that “relentless cuts” to the health service could explain as many as 30,000 “excess deaths” in England and Wales in 2015, the government denounced this as “a triumph of personal bias over research”, which, however you slice it, is a callous prep school debater’s response to the reality of 30,000 fresh graves.

There is a species of evil in which an individual allows the dark and yammering corners of his mind to direct him to put a blade in a bystander’s belly, or a bomb in a bustling crowd of teenage girls. That sort of monstrosity is as easy to identify as it is mercifully rare, though frighteningly less rare than it was in less febrile times. But there is another sort of evil that seldom makes the headlines. This comes about when someone sits down with a calculator and works out how much it will cost to protect and nurture human life, deducts that from the cost of a tax rebate for local landowners or a nice night at the opera, then comes up with a figure. It’s an ordinary sort of evil, and it has become routine and automated in the austerity years. It is a sort of evil, in the words of Terry Pratchett, that “begins when you begin to treat people as things”. 

The Grenfell Tower disaster was the hellish evidence of the consequences of fiscal ruthlessness that nobody could look away from. Claims that it could not have been predicted were shot down by the victims. The residents’ association wrote on its campaign website after years of begging the council to improve living conditions: “It is a truly terrifying thought but the Grenfell Action Group firmly believe that only a catastrophic event will expose the ineptitude and incompetence of our landlord.”

That catastrophic event has happened, and the ordinary British response to tragedy – brave, mannered dignity – is inappropriate. When the Grenfell inquiry launches next month, it is incumbent on every citizen to call for answers and to call this kind of travesty by its name: murder by numbers.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder